Sydney

Prime time for Australian inbound tourism

2015-11-08T13:00:00Z

Sydney and Melbourne accommodation markets reap the benefits

​​Inbound visitor arrivals have increased by 6.6% Y-O-Y September 2015 to total 7.1 million, powered by increased airline capacity, a weakening Australian Dollar and improved economic conditions of key inbound source markets, according to Tourism Research Australia's Tourism Forecast 2015. This number is projected to further increase by 4.1% over the ten years to 2025, to reach 10.6 million.

Overall, Australia's top-five inbound source markets of New Zealand, China, United Kingdom, United States and Singapore, are expected to provide over 50% of the additional 3.5 million forecast arrivals over the next ten years. According to TRA, the biggest increase is expected to come from the Chinese market, which is set to be responsible for 29% of total growth.

For the 2014-15 period, China accounted for 13.1% of total inbound visitors, second only to New Zealand at 17.8%. However, China is set to take the lead as Australia's largest source market by 2020 at a forecast 18.4% of total visitor arrivals.

Data sourced from the Australian Bureau of Statistics​ reveals that over 60% of overseas visitors spent the majority of their time in New South Wales and Victoria during the first 8 months to August 2015.

This comes as no surprise, as recent STR data shows that Melbourne and Sydney hotels, in particular the five-star segments of these markets, have recorded strong RevPAR growth to September 2015, driven by record occupancies nationally at around 88% each, while ADR has also exhibited strong growth YTD at $275 and $279, respectively.

Furthermore, Sydney's hotel sub-markets are also experiencing unprecedented trading conditions. In the nine months to September, RevPAR is up 9.7% in the Sydney Airport Precinct, 6.7% in Parramatta and 18.5% in Ryde. Occupancy and Average Daily Rate levels in the three markets are now in-line with, or above, many capital cities.

The projected positive growth of inbound visitors, coupled with further growth in airline capacity and the continued moderation of the Australian Dollar, point to the continued exceptional accommodation trading success of the Sydney and Melbourne markets, with other major tourism markets such as Cairns and the Gold Coast expected to follow a similar trend.

Market

Occ %

ADR

RevPAR Growth

Melbourne+

85.7

201.78

4.8%

Melbourne 5+

87.9

274.79

5.0%

Sydney+

87.6

232.67

7.0%

Sydney 5+

87.9

278.87

7.1%

Sydney Airport+

86.6

155.61

9.7%

Ryde+

77.7

170.37

18.5%

Parramatta+

83.3

167.82

6.7%​

Source: JLL/STR Global - Year to Date - September 2015 vs September 2014